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Impact of Trade Openness and Sector Trade on Embodied Greenhouse Gases Emissions and Air Pollutants

Moinul Islam (), Keiichiro Kanemoto and Shunsuke Managi

MPRA Paper from University Library of Munich, Germany

Abstract: The production of goods and services generates greenhouse gases (GHGs) and air pollution both directly and through the activities of the supply chains on which they depend. The analysis of the latter—called embodied emissions—in the cause of internationally traded goods and services is the subject of this paper. We find that trade openness increases embodied emissions in international trade (EET). We also examine the impact of sector trade on EET. By applying a fixed-effect model using large balanced panel data from 187 countries between 1990 and 2011, we determine that each unit of increase in trade openness results in a 10% to 23% increase in GHG embodied emissions (EE). The sector trade effect is also significant for the EE of carbon dioxide (CO2), methane (CH4) nitrous oxide (N2O), carbon monoxide (CO), non-methane volatile organic compounds (NMVOCs), particulates (PM10 ) and sulfur dioxide (SO2). Our findings also clearly indicate that the impact of the GDP on the EE of exports is positive, increasing emissions, but that it is negative on the EE of imports. We suggest that countries monitor trade sector emissions and trade openness to mitigate global embodied GHG emissions and air pollutants.

Keywords: environmental economics; greenhouse gases (GHGs); industrial ecology; input-output analysis; international trade; trade and environment (search for similar items in EconPapers)
JEL-codes: F1 F18 L52 (search for similar items in EconPapers)
Date: 2016-03-08
New Economics Papers: this item is included in nep-ene, nep-env and nep-int
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Journal Article: Impact of Trade Openness and Sector Trade on Embodied Greenhouse Gases Emissions and Air Pollutants (2016) Downloads
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